Congress Introduces Bill to Block Hedge Funds from Buying Single-Family Homes

Ear­li­er this month, in response to the grow­ing U.S. hous­ing afford­abil­i­ty cri­sis, Demo­c­ra­t­ic law­mak­ers from both hous­es of Con­gress intro­duced bills that, if passed, would ban hedge funds from pur­chas­ing - hous­ing mar­ket, reports Chris Clow of Hous­ing­Wire. They would also be required to sell off all sin­gle fam­i­ly homes they own over a decade.

Sen. Jeff Merkley of Ore­gon intro­duced the “End Hedge Fund Con­trol of Amer­i­can Homes Act of 2023” to the Sen­ate. Rep. Adam Smith of Wash­ing­ton intro­duced the House ver­sion.

Clow’s also cites a piece from the New Times that report­ed that Demo­c­ra­t­ic Reps. Jeff Jack­son and Alma Adams of North Car­oli­na intro­duced a sep­a­rate bill, the “Amer­i­can Neigh­bor­hoods Pro­tec­tion Act,” which would require cor­po­ra­tions own­ing more than 75 sin­gle fam­i­ly homes to pay a year­ly fee of $10,000 per home into a hous­ing trust fund to be used for down pay­ment .

Accord­ing to the Urban Insti­tute, as of June 22 insti­tu­tion­al investors owned 3 per­cent of all sin­gle-fam­i­ly rentals nation­wide, but in more afford­able mar­kets, their mar­ket shares are con­sid­er­ably high­er; the top three are Atlanta (28.6 per­cent), Jack­sonville (24.2 per­cent), and Char­lotte (20.1 per­cent). More recent­ly, data ana­lyt­ics Core­L­og­ic report­ed that despite the ane­mic hous­ing mar­ket, investors have been busy, buy­ing near­ly 26 per­cent of sin­gle-fam­i­ly homes that sold in June 2023.

“You have cre­at­ed a sit­u­a­tion ordi­nary Amer­i­cans aren’t bid­ding against oth­er fam­i­lies, they’re bid­ding against the bil­lion­aires of for hous­es,” Sen. Merkley told the New York Times. “And it’s dri­ving up rents and it’s dri­ving up the home prices.”

The law­mak­ers acknowl­edge the leg­is­la­tion is unlike­ly to pass giv­en the cur­rent cli­mate in Con­gress. Still, Con­gress must start the con­ver­sa­tion on this ,” Rep. Smith said in an inter­view with the Times.

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